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Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $1.90 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Year 3 First 96,000 126,000 186,000 136,000 106,000 Year 2 First Second Third Fourth Budgeted production, in bottles The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 76,800 grams of musk oil will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Mink Caress Direct Materials Budget - Year 2 First Quarter Second Quarter Third Quarter Fourth Quarter Year Required production in units of finished goods Units of raw materials needed per unit of finished goods 96,000 126,000 186,000 136,000 106,000 4 4 4 Units of raw materials needed to meet production 384,000 504,000 744,000 544,000 424,000 Add: Desired units of ending raw materials inventory Total units of raw materials needed Less: Units of beginning raw materials inventory Units of raw materials to be purchased Unit cost of raw materiais Cost of raw materials to purchased Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $1.90 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Year 3 First 96,000 126,000 186,000 136,000 106,000 Year 2 First Second Third Fourth Budgeted production, in bottles The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 76,800 grams of musk oil will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Mink Caress Direct Materials Budget - Year 2 First Quarter Second Quarter Third Quarter Fourth Quarter Year Required production in units of finished goods Units of raw materials needed per unit of finished goods 96,000 126,000 186,000 136,000 106,000 4 4 4 Units of raw materials needed to meet production 384,000 504,000 744,000 544,000 424,000 Add: Desired units of ending raw materials inventory Total units of raw materials needed Less: Units of beginning raw materials inventory Units of raw materials to be purchased Unit cost of raw materiais Cost of raw materials to purchased
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Related Book For
Managerial Accounting for Managers
ISBN: 978-1259578540
4th edition
Authors: Eric Noreen, Peter Brewer, Ray Garrison
Posted Date:
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